Shares of Chinese electric vehicle maker Nio (NIO -5.13%) were trading lower on Wednesday morning after the company cut its guidance for first-quarter deliveries.
As of 10:30 a.m. ET, Nio’s American depositary shares were down about 6.2% from Tuesday’s closing price.
After a rough start to 2024, Nio cut its guidance for first-quarter deliveries on Wednesday. Image source: Nio.
Nio said first-quarter sales will fall short of its earlier expectations
Nio said in a statement on Wednesday that it now expects to deliver about 30,000 EVs in the first quarter. That’s down from its earlier guidance, which called for deliveries of 31,000 to 33,000 in the period.
Nio’s sales grew almost 31% year over year in 2023. But the first two months of 2024 were a different story. The EV maker’s deliveries in January and February combined were down 12% from the same period last year, to 18,177 vehicles.
Wall Street has already begun rethinking the case for Nio’s stock. Earlier this week, analysts at Mizuho cut their rating on Nio’s U.S. shares to neutral, from buy, with a price target of just $5.50.
There might be a silver lining for Nio investors in this news
Guidance cuts are not usually good news for investors, and that’s why Nio’s shares were down on Wednesday morning. But there might be a small silver lining here. Nio’s revised guidance suggests that March deliveries will come in around 11,800 — a number that would be up 14% from its result in March 2023.
If so, Nio might be able to argue — maybe persuasively — that its January-February decline was just a blip. We’ll know more when Nio releases its March sales numbers, likely early next week.
John Rosevear has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio. The Motley Fool has a disclosure policy.